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Mercer was born in Wakefield, Yorkshire, England, the son of an engine driver, while his mother had been a domestic servant. Both of his grandfathers had been miners.[1] After failing to gain entry to the local grammar school, Mercer left school at 14, worked as a technician and in the Merchant Navy[2] before attending university. After attending courses at Wakefield Technical College he matriculated at University College, Durham to study chemistry, but eventually grew bored of this and switched to studying art at King's College Newcastle - which was then part of Durham University.[3] Just after graduation he married Jitke Sigmund, a Czechoslovakian refugee who was studying Economics at King's.[4] Her father had been killed by the Gestapo.[1] With his wife, he spent a year in Paris living with emigres from various Communist regimes, where he attempted to become a painter. On realising he was not cut out to be a painter he burnt all of his canvasses and turned to writing instead.[5]

In late 1957, now separated and living with Dilys Johnson (whom he later married), he rented a room in a flat at 10 Compayne Gardens, London NW6, that was rented, in turn, by the poet Jon Silkin from Rudolf Nassauer (a wine merchant, poet, and novelist) and his wife, Bernice Rubens, who was later winner of the 1970 Booker Prize. The historical novelist Malcolm Macdonald, then a student at the Slade, was another of Silkin's tenants at that time. There Mercer wrote a more political novel whose acerbic Northern hero, Congo Booth, was an early prototype of many disaffected-marxist heroes in his television work. Neither novel was ever published. All three – Silkin, Mercer, and Macdonald – earned a living teaching English as a Foreign Language at the St Giles School of English in Oxford St. Mercer later taught English and Science at the Hairdressers College until his television and stage earnings enabled him to write full-time.

Mercer began his career as a television dramatist with the play trilogy, The Generations, being composed of Where the Difference Begins (1961), the anti-nuclear piece A Climate of Fear (1962) and the non-naturalistic The Birth of a Private Man (1963). A Way of Living (1963) was another naturalistic piece, and dealt with the division between a young fisherman and a girl from a mining family who is about to go to university. Three other television plays from this period - A Suitable Case for Treatment (1962, film adaptation: Morgan, 1966), For Tea on Sunday (1963) and In Two Minds (1967) share a concern with madness or, in the critic John Russell Taylor's words, "social alienation expressed in terms of psychological alienation".[6]In Two Minds, directed by Ken Loach, was remade as the feature film Family Life (1971), again directed by Loach.

Mercer's first play to be written for the stage, Ride a Cock Horse, was seen in the West End in a 1965 production starring Peter O'Toole. An early work, the one-act The Governor's Lady, in which an elderly colonial governor gradually turns into a gorilla, was originally written for radio in 1960 but not performed until it was staged by the Royal Shakespeare Company (RSC) in 1965. The RSC later stage many of Mercer's works, including his next play Belcher's Luck (1966), "a wild tragi-comedy full of Lawrentian symbolism about fertility and impotence".[7]

Other plays for television broadcast in the 1960s are And Did Those Feet (1965), The Parachute (1968) and Let's Murder Vivaldi (1968)[8] and another trilogy, comprising On the Eve of Publication (1969), The Cellar and the Almond Tree (1970) and Emma's Time (1970). The content of this body of work made John Russell Taylor regard Mercer as the most political of British dramatists of this period.[9] Much of Mercer's television work for the BBC was made in collaboration with the director Don Taylor.

Mercer is depicted as Malcolm Sloman in the Trevor Griffiths play The Party (1973). In 1982, The Arcata Promise, a stage adaptation of the 1974 television play, was produced by Brockman Seawell and premiered in New York in 1982, starring Brian Murray.[11]